Wiggins was on hand at the Hazelwell Centre, Haswell, in front of a large crowd of on-lookers to officially reveal the new monument.
Simpson was born in Haswell on September 30 1937, and went on to become one of Britain's most successful cyclists. He tragically died during the Tour de France on July 13 1967 as he climbed Mont Ventoux, aged 29.
Wiggins paid tribute to Simpson, whom he cited as one of his life-long cycling heroes and an inspiration.
"He was my hero," Wiggins told ITV News.
"He transcended the sport, his personality back then differed from so many. In today's day and age he would have been a superstar, and I think he has that star quality."
The new monument to Simpson joins those at the Kuipke velodrome in Ghent, Belgium, and on Mont Ventoux, France.
"The way cycling is now, it's so much about results and the here and now," said Wiggins.
"A lot of people don't know that much about the history of the sport any more, and the reason why cycling is so popular today is because of people like Tom. Without that cycling wouldn't have the popularity it does today."
The memorial stone was unveiled on the 50th anniversary year of Simpson's death.
Wiggins gave a trademark light-hearted comment during the unveiling ceremony as he followed on from a speech given by local historian Alan Liversidge. "I won't bore you like Alan," said Wiggins. "I didn't bring a four-page speech!"
He went on to thank the large crowd for turning out and went on to chat with local cyclists and spectators.
Cycling author, journalist and Simpson's nephew Chris Sidwells said: "It's great to finally have something to remember Tom by in the village where he was born. My cousin Judith Walton, who lives in the area, got the job done, and when I asked Sir Bradley Wiggins to unveil the memorial for us he didn't hesitate.
"It was a great day, with at least 500 people of all ages in attendance, and I think Bradley autographed something and had his photo took with every one of them. Tom's daughter Joanne Simpson traveled from Belgium to be there, and she was delighted that so many turned out to make it a day to remember."
Simpson was the first British rider to win the World Championships road race (1965) and won the one-day monuments Milan-San Remo and the Tour of Flanders among his many achievements.
A post-mortem after his death revealed that he had died of a combination of heat, and amphetamines and alcohol.
Wiggins is also in British cycling's hall of fame, having been the first rider from the nation to win the Tour de France (2012), and claim eight Olympic cycling medals. Wiggins retired from professional cycling in 2016.
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